Loss of LAFHA 'will have a profound effect' on 457 visaholders

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Created on Thursday, 16 August 2012 15:14

Written by Editorial staff

Proposed changes to the Living Away From Home Allowance (LAFHA), which are expected to take place later this year, could have a concerning impact on the 457 visa program, according to one Liberal MP.

Speaking after the publication of a new report on the proposed changes - which was released on Wednesday (August 15) by the House of Representatives Economics Committee - Steven Ciobo expressed his fears over the impact of the reforms on current 457 visa holders.

The report supports measures announced by the government earlier this year to tighten up the eligibility criteria for the LAFHA.

Previously, 457 visa holders were able to claim the LAFHA if they could demonstrate intent to return to their home country at the end of their visa period - but under the new arrangements, the tax-free allowance will only be made available to those who maintain a home elsewhere in Australia and are required to live away for a specified portion of the year for work.

The changes mean that the LAFHA will be used primarily to support Australian workers who are temporarily based away from home, rather than 457 visa holders.

Most of the measures came into effect at the beginning of the 2012-13 financial year - and most new 457 visa applicants are no longer eligible for the LAFHA unless they meet the new criteria- but some 457 visa holders are currently still able to claim the LAFHA under transitional arrangements that will remain in place until the beginning of October.

The AAP reports that Mr Ciobo's main concern, which he expressed in parliament on Wednesday, is that by making the majority of 457 visa holders ineligible for the LAFHA, Australia may become a less appealing destination for skilled foreign workers.

Given the contribution that these individuals make to the nation's economy, he asserted that LAFHA is an important and timely issue to discuss.

"457 visa holders, of which there are approximately 90,000, make a very substantial contribution to the skilled labour force that Australia enjoys," he said.

However, he clarified that the Liberals are not opposed to the recommendations set out in the report.

It is not the first time Mr Ciobo, the federal member for Moncreiff, has spoken about immigration issues.

Last June, he called the closure of the DIAC's Gold Coast office a "slap in the face" for the nation's sixth-largest city.